Left vs. Right Dictators

Any process that ignorant voters could use to decide who to trust on [banking] regulations could also be used by ignorant consumers to decide which banks to patronize. Since banking consumers have far stronger incentives to choose well on banks than voters have to choose well on politicians, how can it help to replace a possibly quite severe ignorant banking consumer problem with an even more severe ignorant voter problem?

Surprisingly to me, manycommentersargued that voters do not control banking regulators – regulators are an autonomous force that choose according to their own reasons. And most who said this seemed to think it a good thing. I’d guess, however, that they wouldn’t be as eager for autonomous regulators in these five areas:

An autonomous police with power to decide who was a criminal, with little oversight from juries, etc.

An autonomous state religion with power to declare God’s will, and to punish those who violate God’s will.

An autonomous military with power to decide when we go to war with whom, and using what methods.

An autonomous censor that can ban any “unhealthy” or “misleading” books, movies, music, etc.

Why do so many support “benevolent dictator” autonomous regulators in banking, product safety, workplace safety, schools, medical devices and drugs, etc., but not in the above five areas? One explanation: traditional (i.e., farmer) societies had these five “conservative” types of regulators, and more modern (i.e., forager) societies were proud to have overthrown or constrained them in the process of becoming modern. New “liberal” types of regulators that lower the status of businesses seem much less problematic to those who see liberal-minded folks as intrinsically more trustworthy than conservative-minded folks.

I was making a strictly positive rather than normative point (the guy I linked to even identifies as a “reactionary” who promotes pro-dictatorial right-wing thinkers). mtraven seemed to be alluding simply to Jacobs’ defense of the legitimacy of “Guardian” ethics (which are said to be rooted in military traditions) and his comment didn’t mention the influence of voters. So again, I’d like to hear what you think of the positive argument that voters don’t control regulation and it is to a very significant degree autonomous.

P.S Haven’t read Jacobs’ book, but James Q. Wilson seems to cover somewhat similar and even more relevant ground in “Bureaucracy”, explicitly taking on the public choice models of bureaucratic maximization that economists have come up with.

Your five examples seem to target the individual citizen, so that citizen objects to being controlled. But the “benevolent” ones constrain the behavior of strange “others” like banks or manufacturers or doctors, i.e. not themselves. People are perfectly happy to allow draconian rules on a group of “others” that they can’t see themselves ever being a member of.

David C

I was thinking the same thing. There’s a difference between regulating individuals and regulating corporations. A poor understanding of TINSTAAFL probably increases people’s desire to regulate corporations.

I think the difference hinges around the regulated entities being perceived as more powerful. There are a couple of angles that could make this make sense in terms of how people actually feel. This is as opposed to being a rational justification.

One is simply that an enemy of my enemy is my friend. I may not have particular insight into bank regulators but I know that supposedly they don’t like banks. This makes me feel safer because there is some powerful person opposing a person I fear. This is also explains why people are incredibly angered at the idea of captured regulators. NowI feel that two powerful people are ganging up on me.

The second is a presumed lack of conflict of interest. Its very easy to see why someone would want to take advantage of me in the context of religion or crime. We have lots of stories about this. There are fewer stories about regulators taking advantage of me by over-regulating banks or drug companies.

If this hypothesis is true then highlighting the stories of people harmed by regulation might increase awareness of the conflict of interest between regulators and consumers.

First, the five items you list are all evolutionarily and institutionally old, whereas almost all aspects of the modern economy are evolutionarily novel. Maybe we prefer dictators in novel situations (this would be a reasonable response for a primordial ape tribe.)

Second, in the U.S., historically economic freedoms were restricted first (during FDR’s administration). Social freedoms weren’t expanded until twenty years later. These may be part of the same movement, but a generation separation makes me think these ought to be looked at as separate or in causal succession.

Third, you are conflating the question of whether government should be doing something with whether the agency should be independent. This is a trust issue. Arguably we’re more cognizant of past corrupted abridgment of social freedoms than economic freedoms, and so we’re less trustful of government in the social sphere. This does /not/ appear to be a recent phenomenon. The Bill of Rights has comparatively little to say explicitly about economic freedoms whereas it marks out quite a few social freedoms (in the First Amendment for example)

There are a lot of good arguments for regulation on the basis of consumer safety, but if the regulators really aren’t responsible to the voters there are very real risks of corruption. From electricity and radio to transport of potentially invasive plant species over political borders, there are numerous examples of regulatory standards that putatively benefit the public but that were actually formulated to promote the interests of big businesses who threw their resources into lobbying the lawmakers.

If we are going to have “autonomous” agencies that regulate how we do business, we should really make sure there’s some safeguard that they are actually protecting the public from business, and not protecting the currently big businesses from competition.

I’m not sure if this is quite where Hanson was going with his argument, but I do think it’s something to carefully consider.

jaltcoh, where did Robin say there was no oversight? He said many people support giving power to autonomous regulators over product safety, though they wouldn’t do so for the five examples.

Buck Farmer, the fifth amendment restricts the takings of property, and the fourth amendment may also be conceived as rooted in property rights (it should be noted that many warrants were executed by private citizens back then, and so they could be sued like any common burglar). But thinking of our rights as depending on those amendments rather than the lack of granting the constitutional authority in the first place is somewhat anachronistic (the Federalists made that objection about the usefulness of the B.O.R and their opponents responded with the 9th & 10th).

Buck Farmer

Good catches, TGGP.

I’m trying to figure out historically if fighting for greater economic freedom dominates fighting for greater social freedoms. Over the long-view of history I can only think of a handful of cases where economic freedom (from government regulation) expanded…and usually due to government failure or neglect.

AspiringRationalist

There have been many expansions of economic freedom throughout history, some (though certainly not all) pushed by governments:
– Abolition of slavery
– Lending money for interest is expressly allowed (as opposed to in many places during the Middle Ages)
– Free trade agreements
– A long-term historical trend towards less government corruption
– Improved law enforcement, resulting in protection from theft and extortion
– Breaking down of caste systems in traditional societies
– Depending on your point of view, intellectual property law could be construed as either increasing or decreasing economic freedom
– Greater freedom of movement than existed in most places a few centuries ago

And then of course technology has massively increased realized economic freedom regardless of which direction governments push it.

Doug

In almost every conservative dictator case the “regulator” is higher status than then the “regulatee.” I.e. powerful police imposing their will on poor minorities, venerable religious authorities controlling common people, generals conscripting the masses, etc.

In contrast the liberal regulators are almost always lower status than the regulatee. These tend to be rich, powerful and connected business executives against lowly underdog bureaucrats, whistleblowers and Erin Brokovich wannabes.

Psychohistorian

This seems almost fatuous. Regulators in this context control the interaction between two private entities with oft-conflicting interests, in that they each want to cheat each other out of money. Regulators serve principally an oversight function. They don’t make you buy securities. A more reasonable analogy would be to an autonomous agency that oversaw the police, or that oversaw churches, or that oversaw the bedroom police, or that oversaw the FCC. I doubt people would be much opposed to any of those, except perhaps the church one.

The process voters would use for selecting bank regulators is called, “leaving it to their elected representatives.” We don’t have a direct democracy, and pretending we do doesn’t change that fact. I think that as the federal government expands in its scope, the quality of legislators tends to go down, because unsophisticated parties are more inclined to vote, and voters are less inclined to care about technical issues as opposed to OMGTEHGAYS!!1!

If legislators are moderately competent at appointing what are essentially technicians, or if they defer in favor of external signals (i.e. prestigious credentials) and those signals are moderately accurate, it’s quite possible to do a lot better than Joe Sixpack in ensuring banks do not scam consumers.

They aren’t autonomous, just semi-autonomous, another check and balance and division of power in a complex power sharing arrangement. And we do have #3. Since when has the commander in chief asked to go to war?

lxm

…how can it help to replace a possibly quite severe ignorant banking consumer problem with an even more severe ignorant voter problem?

1. Doesn’t the use of ‘ignorant’ beg the question?

2. Using the same logic why have voting at all?

3. Balance of power/information between banks and customers and banks and voters is lopsided. Your argument seems to say let’s keep it that way.

4. Looks to me that your whole argument is just another clever way to attack regulations and regulators which is all fine and dandy except that bad regulation or no regulation leads to bad results.

What Robin is trying to signal by being disparaging of regulators and voters is that he doesn’t need regulators to protect him, that he is competent enough to protect himself.

While that signals to others who don’t want regulations that Robin is one of them, to those who do want regulations it signals that Robin is one of those that regulations protect against and that he doesn’t want regulations so he can more easily exploit those who cannot protect themselves, those ignorant voters who get exploited because they deserve to be exploited.

Mercy

If we expand this analogy – non-marginalised leftists oppose anti-marginalised group regulation to demonstrate their moral and sexual security, and rightists oppose them because they see that as a signal of belonging to sexual or moral barbarians (muslimic ray guns and people who want to marry toasters) – the only way to differentiate them is to ask whether endless laissez-faire or unlimited sexual liberty really did reduce people’s realised freedom. Sometimes looking at the signalling just takes you back to the issues.

Aren’t all organized religions and/or ideologies based on that? That is one of the most fundamental tenents of social cohesion – to define what behaviour is approvable and what is not and to define the social norms and punish the violators.

Buck Farmer, the NEP under Lenin and China’s transition under Deng didn’t happen because people “fought for” economic freedom. Rulers just started allowing more because existing policies didn’t serve their purposes very well.

Doug, Hanson has also banged the status drum on paternalism/regulation. Tim Cavanaugh usually annoys me, but I figure I’ll link to his H&R post on zoning since it takes a similar angle.

Psychohistorian, the whole point of this post was to respond to those who dismissed Robin’s earlier critique about ignorant voters choosing people to regulate them, on the basis that regulators were autonomous from elected officials and voters.

lxm, I suppose Robin’s implicit assumption is that the masses are equally ignorant in their consuming and voting behavior. Paternalistic regulation is justified by protecting people from their own ignorance.

daedalus2u, interesting signalling argument that fits with the old OB post on “self made men”. But I found your suggestion that Robin himself is one of the exploiters we are to be protected against. He personally doesn’t seem to be subject to much regulation, although I do recall him complaining about I.R.Bs for academic research. Isn’t the more plausible line that he is a mouthpiece for those actually doing the exploiting?

Ironmistress, I am confused by a lot of things you say. In America judges and even D.As (at the local level) are often elected. And we have the jury system, in which a random selection of the ignorant masses gets to vote whether someone gets convicted. You seem to agree with Robin on the second point. Blackwater is nothing like Robin described, that would be the East India Company. Congress is supposed to have authority over going to war in the U.S, but it is the President (not a private company, which acts as a non-autonomous contractor) who has near dictatorial decision power. For #4, see #2, organized religions are not granted that authority in the first world, we have governments staffed by elected officials plus the degree of bureaucratic autonomy which is the subject of this post. Point 5 is interesting and clever.

TGGP. yes, sorry I wasn’t more clear. Robin does serve as the mouthpiece of those who want less regulation so they can exploit more. He would benefit from the “trickle down” of that exploitation, so yes, he is one of the exploiters, or their lap-dog, which is much the same thing. Lower than those doing the exploiting, but higher than those who are exploited.

“Any process that ignorant voters could use to decide who to trust on [banking] regulations could also be used by ignorant consumers to decide which banks to patronize.”

What? Banks and politicians are two fundamentally different kinds of entities. Different kinds of processes may be available to investigate the two. This is a fantastically sweeping statement, made as if it were simple fact.

This is a blog on why we believe and do what we do, why we pretend otherwise, how we might do better, and what our descendants might do, if they don't all die.